Month: September 2019

Too big to fail! That’s what they’ve said about many companies over the years but the sad collapse of the travel company Thomas Cook proves that if you don’t change with the times then you are never too big to get caught in the crossfire.

Woolworths, HMV, Blockbuster, Nokia, Motorola, Pan-Am and many more have all proven that business can change almost daily especially in the 21st century and unless you have a dynamic approach and a controllable cost base then you are always at risk.

This won’t be of any comfort to the thousands of hardworking Thomas Cook staff with mortgages to pay that find themselves without a job this week and who were the backbone of a business that had been swimming against the tide in recent months. Let’s not also forget the thousands of holidaymakers who have had their plans seriously disrupted but hopefully the majority will be covered by the much maligned ATOL scheme which is designed for moments like this. The wave of nostalgia has been immense but there’s no room for nostalgia in a dog eat dog industry where every man and his dog is now an ‘online travel agent’.

Thomas Cook’s (TC) woes have been well documented but as the dust settles over the coming days the finger pointing will start and answers will be demanded. Many other businesses will also be out of pocket and some may even face potential bankruptcy as a consequence

TC’s unwillingness to fundamentally change their business model will ultimately be seen as the reason for their failure. As others were redefining the travel industry Cooks were too bogged down with a high cost base and a structure and culture that wasn’t open to change. As one leading industry figure told me “buying Airtours and the Co-op travel agencies were 2 deals that defined the demise of this well known institution. Buying bricks and mortar when all forward thinking travel companies were investing in cutting edge technology was always a baffling decision”.

The merger with MyTravel (previously known as Airtours) was particularly harmful to TC and obligated them to a mountain of debt and lumbered them with crippling interest payments. Why they decided to merge with MyTravel rather than let them fail then pick through the bones may well lie in old school tour operator values where market share and bragging rights in the boardroom was favoured over bottom line principles. Hindsight is a wonderful thing but you live and die by your decisions and TC had an extended period of making the wrong ones.

Recent senior management for all their well meaning bluster (and inflated pay packets) couldn’t cut the mustard or radically change the company for the better even with their own fully functioning airline. The rise of online travel agents, no frills airlines and accommodation only websites offering great deals for direct customers married with Cooks unwillingness to streamline led the company to the precipice and when the banks asked for an extra 200 million pounds to cover potential winter losses the writing was on the wall. After the UK government refused to cover the shortfall it was game over.

For those, like myself, who have worked in the travel industry this isn’t the first time this has happened and it won’t be the last but this could be a watershed moment for short haul tour operators who don’t have a nimble structure. As a major hotelier commented to me “in a time when people can build their own holiday experiences via multiple travel websites and apps, Thomas Cook didn’t adapt and found themselves down the pecking order when people booked their holidays.”

Like all those aforementioned businesses it was the paying public who ultimately sealed TC’s fate by not buying enough of what they had to sell during changing times and tastes. Cook’s inability to be flexible costing them dearly not to mention over 500 high street stores with agents sitting around waiting for potential customers to walk through the door.

It’s a sad time but also a sobering reminder that business doesn’t stand still and although doors will open for other entrepreneurs to fill the gap other operators and carriers will be raising their prices with glee in the short term.

Thoughts are with everyone affected at this difficult time but the UK travel industry is a resilient and dynamic beast and if history has taught us anything it’s that it will bounce back stronger but this time in a leaner, more efficient way.

A good friend of mine nearing his 60th birthday has just departed after a busy 1 week holiday and here are his thoughts on the matter…

———————-

They say that age is just a number but that number can affect people in different ways. When visiting Ibiza age doesn’t matter if you’re spending time with friends and family by the pool, at the beach and in the restaurants but that’s not what attracted you to the White Isle in the 1st place as a spotty faced youngster!

No, it was the West End bars of San Antionio and the lure of the Super Clubs and boat parties, if it was good enough for George Michael and Freddie Mercury…

As you move through the years these places become a long lost memory rather than relevant to you. As you gather your own money progress is made to rent your own villa in the hills, dinner at Pikes, book a VIP table at Hï or Pacha or a daytime bed at a swanky beach club like Destino, all of which have sprung up as you have made it to your later years.

Everything was fine as you cruised through your 30’s and early 40’s but you now avoid the strip of Playa den Bossa and West End of San Antonio as it’s full of ‘kids’ and you start to venture to other parts of the island like Blue Marlin, Ushuaia, Pacha and more recently Lio.

Then the big 50 comes and goes and you’ve now lost at least 50% of your original group of friends so you try to find some younger mates to hang out with so you can still raise your hands in the air and sway from side to side in a hot sweaty super club (VIP of course for anyone over 35).

You’ve been coming for so many years that you eventually find a mate with a boat; not because you like him, or he’s funny, witty or engaging. It’s just so you can impress anyone you meet with the opening line ‘at our age we really only come over to meet up with our friends that live here…. only to drop into the conversation later .. oh yes he’s got a speedboat if you fancy coming out with us for the day’.

So, when are you too old to party like you did when you were 21?

If you were back in the UK then similar cool bars wouldn’t even let you in if you looked remotely over 30 let alone staring 60 in the face!

So what? Give up coming at 50?

If you attempt to go anywhere near a dance floor approaching 60 you will look like a rabid ‘dad dancer’ on ketamine but somehow you can still turn up at certain places in Ibiza and be welcomed with open arms as there is a tolerance of people of any age, creed or sexuality which just doesn’t happen in most other countries ‘party places’.

So if you choose your ‘itinerary’ carefully, you can still enjoy the party at any age. You maybe conscious of being on the outside looking in but the really great thing about Ibiza (and why us old farts keep coming back) is that no one else will care except you…

There’s no doubt that the White Isle is rapidly evolving but the one phrase I hear more than any other these days is that Ibiza ‘isn’t what it was’.

I started coming to the island in the 70’s as a small child with my family for the typical bucket, spade and sangria holiday, I missed out on the 80’s but came over in the early 90’s and never left so when it comes to Ibiza’s recent history I can happily say I had a front row seat.

It’s not easy to objectively compare different eras but this debate has been raging since I first set foot on the white Isle, in fact I clearly remember being told that ‘Ibiza isn’t what it used to be’ in my first few days here, the cycle repeats itself every year.

Ibiza constantly changes, it’s a self perpetuating micro experiment of life and always will be. One of the worlds most beautiful islands run by the offspring of farmers and fisherman who had the spotlight thrust on them. In terms of a brand it’s massive, if Ibiza was a Fortune 500 company then it would have a hot-shot CEO but it hasn’t yet it still works.

There’s no debate that the island has changed beyond recognition especially over the last 10 years however every era has its place clearly etched in history.

For those who ‘discovered’ the island in the 60’s there’s still that romantic vision of free love, living in the countryside and big lunches with friends that cost next to nothing but when you analyse it every era has its pros & cons.

When you’re young and fearless with no ties you have an attitude that is totally different to when you’re middle aged with a couple of kids but the island’s magic repeats itself for every generation in different ways. What some see today as a backward step is viewed by others as exactly the reverse.

Like those from the 60’s we all have romantic visions of a time in our lives that was special to us and Ibiza is that seminal place that makes memories for a lifetime so if you return and it’s changed beyond recognition of course it’s not what it was but it doesn’t mean it’s worse, it’s just different.

The early days when I came to Ibiza will forever be a magic time in my life but you could also only get flights for 7 or 14 nights, the roads were death traps, the hotels were basic with no air conditioning and the big clubs were inaccesible to many, mainly through lack of knowledge (no ‘influencers’ in those days!).

Those long mornings on Space terrace can never be repeated but have now been replaced by daytime concerts attended by thousands, beautiful beach clubs and world class nightclubs showcasing the biggest DJ’s as well as emerging talent, it’s different but the joy and the thrill remains the same with the hands in the air moments creating an adrenaline rush and memories to last a lifetime.

The Ibiza of today isn’t without challenges but it’s still an amazing place, making an indelible mark on every generation. The social media obsessed world we live in has created different needs and the ‘new’ Ibiza is just a reflection of that but scratch below the surface and the island still retains the charm and beauty it always has, you just have to stop being part of the herd and work a little harder to find it. Of course Ibiza isn’t what it was, it’s better.